OPEC Statement to the 5th Conference of the Parties to the UN Framework Convention on Climate Change - Bonn, October-November 1999

By Dr Shokri Ghanem, Director, Research Division, In Charge of the OPEC Secretariat

High-level Segment, Bonn, Germany, October 25–November 5, 1999

Excellencies, ladies and gentlemen,

As we stand on the threshold of the 21st century, OPEC's Member Countries maintain a keen interest in the progress of the international climate change negotiations. While wishing to preserve the integrity of the environment at global and regional levels for current and future generations, we stress that, at the same time, a sense of equity across all nations must prevail. In short, there must be no net winners and no net losers from these negotiations, as they run their course.

It is essential not to lose sight of other broader issues, particularly those affecting the destiny of countries from the developing world. Among these are most of the world's oil-exporting nations.

As it stands, the Kyoto Protocol, if fully implemented, would lead to a dramatic loss of revenue for oil-exporting developing countries, including OPEC's own Members. The financial impact on our countries has been estimated at tens of billions of US dollars per year, according to OPEC's calculations. Similar conclusions were reached in the studies presented at the UNFCCC Expert Workshop held in Bonn in September, which focused on the implementation of Articles 4.8 and 4.9 of the Framework Convention and Articles 2.3 and 3.14 of the protocol.

Sometimes, when numbers become too large, they become abstracted from reality. For oil-producing developing countries, the numbers involved in the likely revenue loss would strike at the very heart of their economic and social infrastructures, entailing huge cutbacks in such vital services as education and health care. For some, it would mean a demoralising retraction of the tentative steps they have been able to take in developing their economies.

A sizeable revenue loss might also deprive oil-exporting nations of the funds required to provide sufficient production capacity to meet the call on oil in the new century, even with the reduced size of this call as a result of the protocol measures and even in the present more integrated state of the global hydrocarbons industry. Therefore, our Member Countries call upon all the Parties involved in the negotiations to bear the above factors in mind and ensure that they proceed in an equitable manner, balancing the direct issues-at-hand with the broader considerations of the global economy, in particular the plight of the oil-exporting developing nations. In this light, it is imperative that all the climate change issues are addressed with equal importance and urgency, as was foreseen in the Buenos Aires Plan of Action.